Going for Housing Growth: Providing for urban development in the new resource management system

Cabinet has previously agreed that to count towards housing growth targets, capacity will need to be live zoned (enabled in an operative district or unitary plan) and feasible. We propose that councils would also need to provide sufficient infrastructure-ready capacity to meet the level of growth anticipated by the council. Existing requirements to provide sufficient capacity for particular locations and types of housing would likely be retained but sit outside of the housing growth targets system.

While councils will be making use of standardised zones in the new system, it’s proposed they will still have options in relation to where different zones are placed, the overlays applied, and the ability to depart from standardised zones where justified. As a result, feasibility modelling will still be important for ensuring that councils are enabling development capacity in the right places in the new system.   

There are choices about whether feasibility modelling should be entirely based on current costs and revenues, or if councils can make reasonable adjustments to some or all of these inputs for a proportion of the capacity to be provided, recognising that not all housing will be delivered in the short- or medium-term. Whether councils can make adjustments can affect whether capacity is counted in areas where development capacity is likely to become more feasible over time (and therefore reflect market dynamics). It can also rely on increasing house prices, which runs contrary to the policy intent.

We seek feedback on what (if any) adjustments should be allowed when councils calculate feasibility as part of demonstrating compliance with housing growth targets.

The current NPS-UD requires capacity to be ‘reasonably expected to be realised’. We propose that this is not carried over into the new system, as it has been difficult to interpret and apply. We propose to instead include a higher-level requirement for capacity to be ‘realistic’, with guidance provided on what factors may be appropriate to consider. This would include aspects such as the existing use of sites, covenants, and site-specific factors (such as slope).

Cabinet has agreed to set prescriptive rules and guidance for how councils calculate matters such as demand and development capacity. We propose that this includes reporting requirements. These changes would increase consistency, ensure a minimum level of quality, and make capacity assessments more transparent. Changes may include specifying which standards must be considered in calculations of plan-enabled capacity, setting a specific method for calculating feasibility, and requiring inputs, assumptions, and sample outputs to be included in a mandatory methodology section for capacity assessments reports.